German minister mulls slower green revolution

BERLIN (Reuters) - Germany may have to slow down its planned transformation to green energy, Environment Minister Peter Altmaier said on Tuesday in an effort to assuage worries that consumers will bear the brunt of the immense costs of the switch from nuclear.

A year before an election, fears of rising energy bills in Europe's biggest economy have become a major concern for Chancellor Angela Merkel's centre-right government which has ambitious targets for renewables to replace atomic power.

Thanks in part to a law that guarantees renewables above-market rates, Germany has seen a rapid expansion in solar panels and wind turbines. With about 25 percent of German power already derived from green sources, experts say it is well on track to hit its 2020 goal of 35 percent.

"If we let things continue, we will be getting 40 percent or 45 percent of our power from renewable energy by 2020 rather than 35 percent," Altmaier said at a renewables conference.

While the rapid expansion was a good thing, "the faster the expansion of green power is, the more it costs," he said.

Earlier he had said that the switch to green sources could end up with Germany having a surplus of energy which it would have to reduce.

Politicians are acutely aware that consumers end up footing at least part of the huge bill for investing in renewables.

The German unit of Swedish energy group Vattenfall said on Monday consumers may end up paying up to 30 percent more by 2020 to fund the switch which will require investments of about 150 billion euros ($187.75 billion).

Some members of Merkel's government want a new law which would reduce the burden on consumers who have a fee added to their power bills to help fund the switch to renewables.

Economy Minister Philipp Roesler, leader of the pro-business Free Democrats (FDP) junior coalition partner, wants a major reform of the law before the 2013 election.

Underscoring disagreements on energy policy within the ruling coalition, Altmaier, a member of Merkel's conservatives, agrees a rethink is needed but not immediately, arguing such a complex subject needs time.

"It must be clear: the energy switch is irreversible. But it must also be clear that Rome was not built in a day."

UPROAR

Merkel's chief of staff Ronald Pofalla meets Altmaier, Roesler, industry groups and unions later on Tuesday to discuss the progress of the complex switch to renewables from nuclear power and its costs.

Sources in the renewables sector say they think the government may row back on its targets for offshore wind which has been seen as providing the bulk of Germany's green power.

Progress in the sector has been slow due to higher than expected costs and regulatory questions which have deterred investors.

Merkel's cabinet will on Wednesday approve a draft law designed to help the expansion of offshore wind parks but it is unclear whether it will have the desired effect.

Opposition parties seized on Altmaier's comments, with the SPD saying it was "completely unacceptable to slow the expansion of renewable energy."

The Greens said the energy switch was a shambles.

"Peter Altmaier is the first environment minister who frets that renewable energy targets are being reached quicker than expected. An astonishing position for an environment minister," said senior Greens member Juergen Trittin.

The uproar over prices in Germany, which has the second-highest power prices in Europe, has intensified before a decision in October on whether to raise the fee paid by consumers.

Merkel has vowed to keep the 2012 charge to consumers at 3.6 cents a kilowatt hour stable in coming years. However, most experts believe the fee will rise to more than 5 cents in 2013.

Such a jump would mean most households would pay an extra 70 euros on an average annual power bill of 900 euros. They already pay 150 euros for green power.